Here are my questions in regarding some of your newsletter. 1) How did you find the "overhead supply" [when you stated] "CHKP has stacked up a healthy bit of overhead supply between 150 and 160." 2) How do you check the future market, such as SP500 future market and so on? (December 11, 2000)
Overhead supply means that there has been a lot of buying at a particular price that is higher than the current stock price. Looking at a chart of CHKP, during September, October, and November the stock traded as high as 160 to 170 on several occasions, looking as if it was ready to breakout and keep running to further new highs. That is a lot of buying over three months, and as the stock approaches that level once again a lot of buyers are ready to sell to 'get even.' That always pressures a stock as those who bought high at the top are ready to get out and feel lucky they did so. When we are playing a stock that is moving up in a base, we have to watch this overhead supply as we may have to exit positions and then wait to play it up again or to let it break out to a new high on strong volume.
As for futures, we can check that at several sites. We often use the following link:
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